News

The Albanese government has announced a review of the Managed Investment Scheme (MIS) framework, and has already flagged the review will scrutinise property funds.

Jodie Masson founded specialist commercial property law firm Massons in 2016, together with her business partner Leisha de Aboitiz, following a career with some of the big global law firms. Jodie has been a PFA member and supporter for more than a decade.

Welcome to Property Funds Association of Australia’s Podcast on Property, a discussion between property industry experts on the influential trends and stories behind the headline numbers in commercial property investment.

Adam Bronts, Director of Castlerock

Castlerock is a funds management and full-service property group specialising in developing and managing long-term government-leased assets. Adam Bronts has been with the firm since 2003, playing a pivotal role in a successful growth period for Castlerock.

Historically, the insurance market has travelled a cyclical path, varying over time from being a buyer’s market to a seller’s market. The current insurance market cycle might indicate a tough market, but property funds can ensure they are covered in relatively favourable terms if they follow some key steps, according to Ryan Neary, Head of Professional and Financial Lines at GSA Insurance Brokers.

Huge change is ahead for commercial property and property funds as governments and corporates sign up to Net Zero targets and drive the push toward sustainable buildings, according to Annabel McFarlane, Head of Strategic Research - Australia at JLL.

Environmental, social, and governance (ESG) factors within commercial real estate investment are becoming more influential: ESG was a major focal point of discussion at this year’s PFA 2022 Conference and the recent PFA Master Class Series, and is likely to remain a key issue as investors increasingly demand investment products with an ESG focus.

Property funds now have an alternative to the Managed Investment Scheme (MIS) structure, after the new Corporate Collective Investment Vehicle (CCIV) regime commenced on 1 July 2022.

ASIC’s recent enforcement action in relation to unlisted property funds is instructive for PFA members, particularly regarding the design and distribution obligations (DDO) regime under the Corporations Act, which commenced on 5 October 2021.

ASIC has warned fund managers about “greenwashing”, which occurs when an entity or a fund overstates or misrepresents their green credentials. ASIC’s warning is timely as more financial products jump on the ESG bandwagon, and is a reminder that even funds with sound ESG credentials could breach ASIC’s “true to label” requirements if they use exaggerated claims or vague terminology.

ASIC has shown it is more prepared to take action against AFSL holders which aren’t adequately monitoring cybersecurity risks or taking their cybersecurity risk management seriously.

Social Infrastructure is not new in commercial property investment, but there has been an ‘awakening’ in the sector, according to Ryan Banting, General Manager Social Infrastructure at Australian Unity.